As part of its stated Action Plan for Engaging in a Just Energy Transition , the Fonds de Solidarité des Travailleurs du Québec (FTQ) (an investment fund controlled by Quebec trade unions) put forward the following shareholder’s resolution at the Cenovus Energy Annual Meeting in Calgary in April. (The text of the resolution appears on page 51, as Appendix A in the company’s Information Circular):
Resolved: That Cenovus Energy Inc. (“Cenovus”) set and publish science-based greenhouse gas (GHG) emissions reduction targets that are aligned with the goal of the Paris Agreement to limit global average temperature increase to well below 2 degrees Celsius relative to pre-industrial levels. These targets should cover the direct and indirect methane and other GHG emissions of Cenovus’ operations over medium and long-term time horizons. Such targets should be quantitative, subject to regular review, and progress against such targets should be reported to shareholders on an annual basis.
The Board’s written response and recommendation states “…..Cenovus has always and will continue to assess our approach to climate change risk management with a view to maximizing shareholder value. ….Achieving the level of commitment contemplated by the Paris Agreement requires an integrated plan at a national and global level, with policies to guide the actions of governments, individuals and corporations to collectively work together toward the desired outcome. Our view is that it is an overly demanding request, and contrary to the best interests of shareholder value, to require an individual company to unilaterally set targets…. As such, we recommend voting against the proposal.” And sure enough, as expected, the FTQ proposal was defeated by an 89% vote against. The news is summarized and in The Energy Mix and by the CBC .
The Fonds de Solidarité des Travailleurs du Québec (FTQ), along with the Canadian shareholders’ non-profit SHARE, was also part of the recent resolution to Exxon . That resolution, filed in the U.S. by a group of investors led by the New York State Common Retirement Fund and the Church Commissioners for England, proposed that the company develop “short-, medium- and long-term greenhouse gas targets aligned with the goals established by the Paris Climate Agreement to keep the increase in global average temperature to well below 2°C and to pursue efforts to limit the increase to 1.5°C.” In response, ExxonMobil applied for and received permission from the U.S. Securities Exchange Commission (SEC), allowing it to exclude the resolution from its Proxy Circular. In retaliation, SHARE states in a blog, Why we’ll vote against Exxon’s entire board of directors, that it is “recommending to our proxy voting clients that they withhold their support for all Exxon directors at the upcoming annual general meeting on May 29th.”
The “Micromanaging” argument: “Investors Worried About Climate Change Run Into New SEC Roadblocks” from Inside Climate News (May 3), in addition to providing a good overview of shareholder actions, explains: “The term “micromanage” has become the linchpin to objections by companies seeking to block these resolutions. The precedent was set last year when the SEC agreed with EOG Resources, a Texas-based oil and gas exploration company, that a resolution asking the company to adopt emissions goals had sought to “micromanage” the company.” More in “Exxon Shareholders want action on climate change: SEC calls it micromanagement” in the Washington Post (May 8). According to the CBC report about the FTQ resolution at Cenovus, the corporate CEO called the proposal “overly demanding”, and said “we had challenges with the prescriptive nature of the proposal”, echoing the industry’s language and strategy.
To stay up to date: The U.S. non-profit As you Sow monitors corporate environmental and social responsibility, including climate change and the energy transition – through press releases , reports, and an up-to-date database of resolutions .